Why Aegerion Pharmaceuticals Shares Jumped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Aegerion Pharmaceuticals , a specialty biopharmaceutical company, jumped as much as 17% after receiving a price target hike from JPMorgan.

So what: Following the stock's already monstrous run higher, JPMorgan kept its "outperform" rating on Aegerion but upped its price target to $69 from $48. The basis for the price target hike included better physician feedback, increasing patient referrals, and a recent price hike in Juxtapid, Aegerion's lone FDA-approved drug that is used to treat homozygous familial hypercholesterolemia, or HoFH.

Now what: Without letting my emotions get the better of me, I'd call this move higher over the past couple of months in Aegerion absolutely insane! What's more, I'm not sure that increasing the annual price of the treatment from $235,000 to $295,000 is the smartest move. If you recall, Isis Pharmaceuticals and Sanofi's also had their HoFH drug, Kynamro, approved just weeks after Juxtapid -- and it's being priced at a big discount to Juxtapid. For ease of use, Juxtapid is the hands-down winner as it's an oral treatment compared to Kynamro, which is infused. But at a difference of more than $100,000 annually, I'd have to think that Aegerion is playing with fire by boosting its drug price. Needless to say, I'd suggest keeping a football field's distance between you and Aegerion until we get a few quarters of Juxtapid sales under our belt.

Craving more input? Start by adding Aegerion Pharmaceuticals to your free and personalized watchlist so you can keep up on the latest news with the company.

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